What's behind call selling in gold miners

optionMONSTER systems show that a trader sold 5,000 January 37 calls for the bid price of $1.12. This is clearly a new position, as the volume was more than twice the strike's open interest before the session began.

The calls appear to have been sold against stock, as a block of 120,000 GDX shares traded shortly after for $28.225. The combination of stock and options creates a strategy that is looking for lower volatility and/or range-bound trading.

The GDX is down 1.43 percent to $28.56. The exchange-traded fund hit a low of $27.27 a week ago as it collapsed with the price of gold. Shares were at a high above $55 last September but have been trending lower since.